BPMB, Danajamin to start merger talks

Move part of govt’s plan to strengthen the development financial institutions ecosystem

PETALING JAYA: Bank Pembangunan Malaysia Bhd (BPMB) and Danajamin Nasional Bhd have received approval from Bank Negara Malaysia (BNM) to commence negotiations under the first phase of the government’s proposed merger involving the country’s development financial institutions (DFI).

The government proposed in Budget 2020 that BPMB, Danajamin, Export-Import Bank of Malaysia Bhd (Exim Bank) and Small Medium Enterprise Development Bank Malaysia Bhd (SME Bank) would be restructured and merged to strengthen the DFI ecosystem. The merger is expected to lead to greater synergies to achieve development outcomes that would benefit all stakeholders, as well as fulfill the needs of the new economy.

The restructuring plan will be implemented in two phases – the first phase involving the merger of BPMB with Danajamin, and the second phase to merge Exim Bank and SME Bank into the earlier merged entity.

A steering committee, led by the Finance Ministry will oversee the overall smooth implementation of the restructuring plan. The steering committee consists of representatives from the relevant stakeholder ministries (namely the Ministry of Economic Affairs, Ministry of Entrepreneur Development, Ministry of International Trade and Industry), Credit Guarantee Corp, BNM and the four DFIs.

A working committee has also been established to support the steering committee in driving the implementation of the key integration aspects of the merger. The working committee will also provide updates to the public as and when appropriate with regard to the progress of the merger.

Negotiations between BPMB and Danajamin are expected to be completed within six months, said BPMB in a statement yesterday.

BPMB is mandated to provide medium- to long-term financing to the strategic sectors of the economy. Through its wholly owned subsidiary Pembangunan Leasing Corporation Sdn Bhd, BPMB also provides financing to small and mediumsized businesses including those involved in manufacturing, construction, supply, transportation, agriculture, hospitality and information technology.

BPMB had a combined asset value of RM24.7 billion as at Dec 31, 2018.